U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB


(Mark One)

[X]  Annual report under Section 13 or 15(d) of the  Securities  Exchange Act of
     1934

For the fiscal year ended March 25, 2005
                          --------------

[_]  Transition report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934

     For the transition period from   __________________ to ____________________

     Commission file number 0-5278
                            ------

                                 IEH CORPORATION
--------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)

           New York                                               13-5549348
 ------------------------------                               -----------------
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

140 58th Street, Suite 8E, Brooklyn, New York                  11220
---------------------------------------------                  -----
(Address of Principal Executive Offices)                     (Zip Code)

          (718) 492-9673
--------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

Title of each Class                Name of Each Exchange on Which Registered
None                               None

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 Par Value
                          ----------------------------
                                (Title of Class)

     Indicated by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports),and (2) has been subject to such filing requirements for
past 90 days.

                      Yes    [X]                  No [_]


                                      -1-
<PAGE>

      Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

                      Yes    [X]                  No [_]

      The Registrant's revenues for its most recent fiscal year ended March 25,
2005 were $5,321,145.

      On June 30, 2005, the aggregate market value of the voting stock of
Registrant held by non-affiliates of Registrant (consisting of Common Stock,
$.01 par value) computed by reference to the closing price at which the stock
was sold on June 30, 2005 ($0.58) was approximately $772,435.

      As of June 30, 2005, there were 2,303,468 shares of Common Stock issued
and outstanding


                                      -2-
<PAGE>

                                     PART I

Item I.   Business

          IEH Corporation (hereinafter referred to as the "Company") was
          organized under the laws of the State of New York on March 22, 1943
          under the name Industrial Heat Treating Company, Inc. On March 15,
          1989, the Company changed its name to its current name. The Company's
          executive offices and manufacturing facilities are located at 140 58th
          Street, Suite 8E, Brooklyn, New York 11220. The Company's telephone
          number is (718) 492-4448; its email address is ieh@iehcorp.com.

          The Industry in Which the Company is Engaged

          The Company is engaged in the design, development, manufacture and
          distribution of high performance electronic printed circuit connectors
          and specialized interconnection devices. Electronic connectors and
          interconnection devices are used to provide connections between
          electronic component assemblies. The Company develops and manufactures
          connectors, which are designed for a variety of high technological and
          high performance applications. These connectors are primarily utilized
          by those users who require highly efficient and dense (the space
          between connection pins within the connector) electrical connections.

          Printed circuit boards in computers contain the components necessary
          to perform specific system sub-functions. These functions require
          connections, which relay information between electronic components and
          circuit boards, enabling the commands that are input by the user to be
          performed. Electronic connectors, in essence, enable circuit boards
          and electronic components to communicate with each other, via direct
          electrical connection. Connectors also are fundamental to modular
          construction of electronic assemblies enabling the disconnection and
          removal of circuit boards and other electronic components for testing,
          repair, and replacement.

          Connectors may be designed and manufactured in various shapes, sizes
          and specifications to meet specific customer requirements and
          applications. High performance connectors are designed to meet various
          density and pin count (the number of individual connection points
          within each connector) criteria and to provide low forces (the amount
          of pressure needed to make the connection) and electrically efficient
          connections.

          Constant advances in the design of solid-state devices have resulted
          in significantly denser component packaging configurations on circuit
          boards. Historically, a 5" X 8" circuit board may have consisted of
          thousands of circuits with 10 to 30 lines of communication. Under
          those conditions, an insertion force of one pound per contact for each
          of the communication lines formed a common and acceptable standard in
          connection devices. As a result of technological developments in
          recent years, the same 5" X 8" circuit board may contain hundreds of
          thousands of circuits with hundreds of communication lines, and an
          insertion force of one (1) ounce per contact as the standard in the
          industry.

          The Company's Product Line

          The Company primarily manufactures printed circuit board connectors
          that meet military or individual customer specifications. Certain of
          the Company's manufacturing and sales involve the competitive bidding
          process because of the military and/or government status of customers.
          The Company also manufactures a line of standard universal connectors,
          which have common usage in the high technology and commercial
          electronics industries.


                                      -3-
<PAGE>

Item I.   Business (continued)

          The Company's Product Line (continued)

          The Company serves both the commercial and military marketplace,
          manufacturing connectors for avionics, electronics, satellite, radar
          systems, test equipment, medical electronic and related industries.

          The Company is continuously redesigning and adapting its connectors to
          keep pace with developments in the electronics industry, and has, for
          example, developed connectors for use with flex-circuits which are
          used in aerospace programs, computers, air-borne communication
          systems, testing systems and other areas. The Company also provides
          engineering services to its customers to assist in the development and
          design of connectors to meet specific product requirements.

          The Company's electronic printed circuit connectors are sold to
          original equipment manufacturers and distributors. The Company
          supplies its connectors to manufacturers who principally produce and
          distribute finished products as well as to distributors who resell the
          Company's products. Prior to the decrease in military and government
          spending over the last five (5) years, the Company's sales were made
          primarily to the government, military defense contractors and
          aerospace companies. However, since the decrease in military and
          government spending, the Company has modified its product line so as
          to concentrate its sales efforts to commercial electronics companies.
          The Company still continues to market its connectors for use in
          government and military computers; military defense equipment and
          information systems; terrestrial, airborne and aerospace
          communications products; avionics and guidance systems and
          instrumental and electronic testing equipment.

          With the continuing downturn in government contracts over the last few
          years, the Company has been striving the past several years to develop
          commercial accounts.

          Management has instituted several steps to increase productivity and
          increase sales such as downsizing the labor force, implementing
          material changes to make the Company's products more competitive and
          developing machinery and equipment to increase production rates.
          Management believes these initiatives have decreased costs and will
          continue to do so in the near future.

          For the fiscal year ended March 25, 2005, the Company's principal
          customers included manufacturers of commercial electronics products,
          military defense contractors and distributors who service these
          markets. Sales to the commercial electronics and military defense
          markets comprised 24% and 75%, respectively, of the Company's net
          sales for the year ended March 25, 2005. Approximately 1% of the
          Company's net sales for the year March 25, 2005, were made
          internationally.

          New Product Development

          The Company maintains a program to increase the efficiency and
          performance of its connectors to meet anticipated and specific market
          needs. Computer and electronics technology is continuously changing
          and requires the redesign and development of connectors to adapt to
          these changes. Primarily, new technology has dictated a decrease in
          the size of solid-state electronic components and smaller and denser
          high performance connectors. Management believes that a key ingredient
          to the Company's success is its ability to assist customers with a new
          design effort and prepare necessary drawing packages in a short period
          of time. After the customer approves the design, prototypes are built,
          approved by the customer and production is released. As an example,
          six new connectors have been introduced to a major commercial account.
          The Company's design effort on this product line began mid-year 1994
          and was recently completed.


                                      -4-
<PAGE>

                                 IEH CORPORATION

                                     PART I
Item I.   Business (continued)

          New Product Development (continued)

          The new development process with this commercial client has led to
          substantial repeat business in the past fiscal year. The Company now
          has the ability to introduce this line to other commercial accounts.

          The Company has also recently commenced production of two new
          connectors for the aerospace industry. To date early orders for
          pre-production units have been completed and the Company is awaiting
          commencement of production.

          One of the nation's leading radar system manufacturers has contracted
          with the Company for six new designs. The design work is complete,
          approvals have been obtained, and the Company is now in small-scale
          production. The Company anticipates full-scale production when the
          radar system is released for sale by the customer.

          Several years ago, the Company designed and developed a form of
          compliant termination connector, which is named, "COMTAC". This
          product, which utilizes technology known as "Solderless Pin
          Technology", does not require the soldering of connector pins, but
          instead utilizes a spring type locking system in attaching the
          connector to the printed circuit board. This technology was patented
          in the United States under patent No. 4,720,268 and assigned to the
          Company on January 19, 1988. During the fiscal year ended March 25,
          2005 sales of the COMTAC connectors accounted for over 13% of the
          Company's total sales. The Company has sent pre-production units for
          evaluation to certain customers and potential customers. Although
          there can be no assurance of future sales, the Company is optimistic
          that this new technology will lead to an increase in sales.

          Commitments

          The Company has a collective bargaining multi-employer pension plan
          with the United Auto Workers of America, Local 259. Contributions are
          made in accordance with a negotiated labor contract and are based on
          the number of covered employees employed per month. With the passage
          of the Multi-Employer Pension Plan Amendments Act of 1990 ("The Act"),
          the Company may become subject to liabilities in excess of
          contributions made under the collective bargaining agreement.
          Generally, these liabilities are contingent upon the termination,
          withdrawal, or partial withdrawal from the Plan. The Company has not
          taken any action to terminate, withdraw or partially withdraw from the
          Plan nor does it intend to do so in the future. Under the Act,
          liabilities would be based upon the Company's proportional share of
          the Plan's unfunded vested benefits, which is currently not available.
          The amount of accumulated benefits and net assets of such Plan also is
          not currently available to the Company. The total contributions
          charged to operations under this pension plan were $54,643 for the
          year ended March 25, 2005 and $47,519 for the year ended March 26,
          2004.

          As of March 25, 2005, the Company had satisfied the arrears on the
          Union's health and welfare plan.


                                      -5-
<PAGE>

                                 IEH CORPORATION

                                     PART I


Item I.   Business (continued)

          Commitments (continued)

          On June 30, 1995, the Company applied to the Pension Benefit Guaranty
          Corporation ("PBGC") to have the PBGC assume all of the Company's
          responsibilities and liabilities under its Salaried Pension Plan. On
          April 26, 1996, the PBGC determined that the Salaried Pension Plan did
          not have sufficient assets available to pay benefits, which were and
          are currently due under the terms of the Plan.

          The PBGC further determined that pursuant to the provisions of the
          Employment Retirement Income Security Act of 1974, as amended
          ("ERISA") that the Plan must be terminated in order to protect the
          interests of the Plan's participants. Accordingly, the PBGC proceeded
          pursuant to ERISA to have the Plan terminated and the PBGC appointed
          as statutory trustee, and to have July 31, 1995 established as the
          Plan's termination date.

          The PBGC further determined that pursuant to the provisions of the
          Employment Retirement Income Security Act of 1974, as amended
          ("ERISA") that the Plan must be terminated in order to protect the
          interests of the Plan's participants. Accordingly, the PBGC proceeded
          pursuant to ERISA to have the Plan terminated and the PBGC appointed
          as statutory trustee, and to have July 31, 1995 established as the
          Plan's termination date.

          The Company and the PBGC have agreed to the terms of a settlement of
          the matter. The agreement is effective July 2, 2001. Under the
          agreement, the Company and the PBGC agreed on a total sum of $244,000.
          The Company has agreed to make payments as follows:

              September 1, 2003 to August 1, 2004         $2,000 per month
              September 1, 2004 to August 1, 2006         $3,000 per month
              September 1, 2006 to August 1, 2007         $4,000 per month

          Additionally, the Company has made balloon payments of $25,000 each on
          January 1, 2004, May 1, 2004 and May 1, 2005. The Company is also
          obligated to make an additional balloon payment of $25,000 on January
          1, 2006.

          The Company also granted the PBGC a lien on the Company's machinery
          and equipment.

          As a result of this agreement the amount due the PBGC was restated to
          $244,000. $56,000 was paid during the year ended March 25, 2005 and
          $39,000 was paid during the year ended March 26, 2004. The balance of
          $149,000 is reported as follows: $86,000 as a current liability and
          $63,000 as a long-term liability.


                                      -6-
<PAGE>

                                 IEH CORPORATION

                                     PART I

Item I.   Business (continued)

          Marketing and Sales

          The market for connectors and interconnection devices, domestic and
          worldwide, is highly fragmented as a result of the manufacture by many
          companies of a multitude of different types and varieties of
          connectors. For example, connectors include: printed circuit,
          rectangular I/O, circular, planar (IOC) RF coax, IC socket and fiber
          optic. The Company has been servicing a niche in the market by
          manufacturing HYPERTAC (TM) connectors and innovative Company-designed
          printed circuit connectors such as the COMTAC connectors. Previously,
          the Company was one of only three licensed manufacturers of the
          HYPERTAC (TM) design in the United States. In the fiscal year 1996,
          the Company learned that the other two licensees had merged. Moreover,
          the Company, based upon advice of counsel, determined that the
          HYPERTAC technology was no longer protected by a patent, and therefore
          was in the public domain. As a result, the Company notified the
          licensor that it would no longer be bound by the terms of its license
          agreement and the Company ceased making license payments. The Company
          has received a brief notice from the licensor that it disputed the
          Company's interpretations and demanded return of certain equipment. No
          legal proceedings have been instituted by the licensor and the Company
          has not received any further notices. The Company does not anticipate
          manufacturing other types of connectors in the immediate future. The
          Company is continuously experimenting with innovative connection
          designs, which may cause it to alter its marketing plans in the future
          if a market should develop for any of its current or future innovative
          designs.

          The Company's products are marketed to original equipment
          manufacturers directly and through distributors serving primarily the
          government, military, aerospace and commercial electronics markets.
          The Company is also involved in developing new connectors for specific
          uses, which result from changes in technology. This includes the
          COMTAC connectors. The Company assists customers in the development
          and design of connectors for specific customer applications. This
          service is marketed to customers who require the development of
          connectors and interconnection devices specially designed to
          accommodate the customers own products.

          The Company is primarily a manufacturer and its products are
          essentially basic components of larger assemblies of finished goods.
          Approximately 92% and 93% of the Company's net sales for the years
          ended March 25, 2005 and March 26, 2004, respectively, were made
          directly to manufacturers of finished products with the balance of the
          Company's products sold to distributors. Distributors often purchase
          connectors for customers who do not require large quantities of
          connectors over a short period of time but rather require small
          allotments of connectors over an extended period of time.

          One (1) of the Company's customers accounted for 34% and 21% of the
          Company's net sales for the years ended March 25, 2005 and March 26,
          2004, respectively. The Company currently employs 14 independent sales
          representatives to market its products in all regions in the United
          States.


                                      -7-
<PAGE>

Item I.   Business (continued)

          Backlog of Orders/Capital Requirements

          These independent sales representatives also promote the product lines
          of other electronics manufacturers; however, they do not promote the
          product lines of competitors, which compete directly with the
          Company's products. These sales representatives accounted for
          approximately 94% of Company sales (with the balance of Company sales
          being generated via direct customer contact) for the year ended March
          25, 2005.

          International sales accounted for less than 1% of sales for the years
          ended March 25, 2005 and March 26, 2004.

          The backlog of orders for the Company's products amounted to
          approximately $2,600,000 at March 25, 2005, as compared to $1,700,000
          at March 26, 2004. A portion (which management does not believe are
          material) of these orders are subject to cancellation or postponement
          of delivery dates and, therefore, no assurance can be given that
          actual sales will result from these orders. The Company does not
          foresee any problems which would prevent it from fulfilling its
          orders.

          Competition

          The design, development, manufacture and distribution of electrical
          connectors and interconnection devices is a highly competitive field.
          The Company principally competes with companies who produce high
          performance connectors in printed circuits and wireboards for high
          technology application. The Company competes with respect to their
          abilities to adapt certain technologies to meet specific product
          applications; in producing connectors cost-effectively; and in
          production capabilities. In addition, there are many companies who
          offer connectors with designs similar to those utilized by the Company
          and are direct competitors of the Company.

          The primary basis upon which the Company competes is product
          performance and production capabilities. The Company usually receives
          job orders after submitting bids pursuant to customer-issued
          specifications. The Company also offers engineering services to its
          customers in designing and developing connectors for specialized
          products and specific customer applications. This enables the Company
          to receive a competitive advantage over those companies who basically
          manufacture connectors based solely or primarily on cataloged
          specifications. Many of the Company's competitors have greater
          financial resources, market penetration and experience than the
          Company and no assurances can be given that the Company will be able
          to compete effectively with these companies in the future.

          Suppliers of Raw Materials and Component Parts

          The Company utilizes a variety of raw materials and manufactured
          component parts, which it purchases from various suppliers. These
          materials and components are available from numerous sources and the
          Company does not believe that it will have a problem obtaining such
          materials in the future. However, any delay in the Company's ability
          to obtain necessary raw materials and component parts may affect its
          ability to meet customer production needs. In anticipation of such
          delays, the Company carries an inventory of raw materials and
          component parts to avoid shortages and to insure continued production.


                                      -8-
<PAGE>

                                 IEH CORPORATION

                                     PART I

Item I.   Business (continued)

          Research & Development

          The Company provides personalized engineering services to its
          customers by designing connectors for specific customer applications.
          The employment of electromechanical engineers is the anticipated
          cornerstone of the Company's future growth. The Company maintains a
          testing laboratory where its engineers experiment with new connector
          designs based on changes in technology and in an attempt to create
          innovative, more efficient connector designs.

          The Company expended $31,000 and $49,500 for the years ended March 25,
          2005 and March 26, 2004, respectively, on Company sponsored research
          and development activities relating to the development of new designs,
          techniques and the improvement of existing designs. In addition, the
          Company received $31,000 in revenues for the year ended March 25, 2005
          and $49,000 for the year ended March 26, 2004, respectively, pursuant
          to customer sponsored research activities.

          Employees

          The Company presently employs approximately 78 people, two (2) of whom
          are executive officers; two (2) are engaged in management activities;
          four (4) provide general and administrative services and approximately
          70 are employed in manufacturing and testing activities. The employees
          engaged in manufacturing and testing activities are covered by a
          collective bargaining agreement with the United Auto Workers of
          America, Local 259 (the "Union"), which expires on March 31, 2006. The
          Company believes that it has a good relationship with its employees
          and the Union.

          Patents and Licenses

          Electrical connectors and interconnection devices are usually the
          subject of standard designs; therefore, only innovations of standards
          designs or the discovery of a new form of connector are patentable.
          The Company is continuously attempting to develop new forms of
          connectors or adaptations of current connector designs in an attempt
          to increase performance and decrease per unit costs. The Company has
          developed and designed the COMTAC connector, which was patented on
          January 19, 1988, at which time the patent was assigned to the
          Company.

          Governmental Regulations

          The Company is subject to federal regulations under the Occupational
          Safety and Health Act ("OSHA") and the Defense Electrical Supply
          Command ("DESC"). OSHA provides federal guidelines and specifications
          to companies in order to insure the health and safety of employees.
          DESC oversees the quality and specifications of products and
          components manufactured and sold to the government and the defense
          industry. Although DESC continuously requires suppliers to meet
          changing specifications, the Company has not encountered any
          significant problems meeting such specifications and its products
          have, in the past, been approved. The Company is unaware of any
          changes in the government's regulations, which are expected to
          materially affect the Company's business.


                                      -9-
<PAGE>

Item 2.   Properties

          The Company exercised its option to renew its lease on its facility
          for 10 years. The original lease was effective through August 23,
          2001.

          The Company is obligated under this renewal lease through August 23,
          2011, at minimum annual rentals as follows:

          Fiscal year ending March:

          2006          $173,371
          2007           112,765
          2008           112,765
          2009           112,765
          2010           112,765
          2011            75,177
                        --------

                        $699,608
                        ========

          The Company leases approximately 20,400 feet of space, of which it
          estimates; 6,000 square feet are used as executive, sales and
          administrative offices and 14,400 square feet are used for its
          manufacturing and plating.

          The rental expense for the year ended March 25, 2005 and March 26,
          2004 was $169,765 and $112,765, respectively. Rental expense for the
          year ended March 25, 2005 includes a surcharge of $57,210. In addition
          to the base rent, the Company pays real estate taxes, insurance
          premiums and utility charges relating to the use of the premises. The
          Company considers its present facilities to be adequate for its
          present and anticipated future needs. See "Legal Proceedings" for
          certain matters involving the Company's operating facility and
          offices.

Item 3.   Legal Proceedings

          The Company is not a party to or aware of any pending or threatened
          legal proceedings which would result in any material adverse effect on
          its operations or its financial condition.


Item 4.   Submission of Matters to Vote of Security Holders

          No matters were submitted to shareholders during the fourth quarter
          for the fiscal year ended March 25, 2005. We expect to have our annual
          meeting for 2005 sometime in the late second fiscal quarter or early
          third fiscal quarter.


                                      -10-
<PAGE>

                                     PART II

Item 5.   Market for Common Equity and Related Stockholder Matters

          Principal Market

          The common stock of the Company (the "common stock") is traded in the
          Over-The-Counter Market and is quoted on the National Association of
          Securities Dealers Automated Quotation ("NASDAQ") System Bulletin
          Board under the symbol "IEHC"). On January 11, 1993, the Company's
          common stock was deleted from listing on the NASDAQ SmallCap Market
          System because of the Company's failure to maintain the minimum asset
          and shareholders equity requirements. On January 12, 1993, the
          Company's common stock was first quoted over the Electronic Bulletin
          Board (OTCBB).

          Market Information

          The range of high and low bid prices for the Company's common stock,
          for the periods indicated as set forth below. For the period to
          October 29, 1991, the Company was listed on the NASDAQ National Market
          System. On October 29, 1991, the Company's common stock was delisted
          from the NASDAQ National Market System and from October 29, 1991 to
          January 11, 1993, the Company's common stock was listed on the NASDAQ
          SmallCap Market System. On January 11, 1993, the Company's common
          stock was delisted from the NASDAQ SmallCap Market System and on
          January 13, 1993, the Company's common stock was first quoted over the
          Electronic Bulletin Board (OTCBB). Set forth below is a table
          indicating the high and low bid prices of the common stock during the
          periods indicated.

                            Year                        High Bid         Low Bid

          Fiscal Year ended March 25, 2005

          1st Quarter                                    .50              .50
          2nd Quarter                                    .29              .29
          3rd Quarter                                    .39              .39
          4th Quarter                                    .51              .51

          Fiscal Year ended March 26, 2004

          1st Quarter                                    .46              .13
          2nd Quarter                                    .25              .25
          3rd Quarter                                    .20              .18
          4th Quarter                                    .45              .18


          (*) As reported by the OTCBB.

          The above quotations, as reported, represent prices between dealers
          and do not include retail mark-ups, mark-downs or commissions. Such
          quotations do not necessarily represent actual transactions. Trading
          in our securities is sporadic.

          On July 6, 2005 the high bid for the common stock was .58 and the low
          bid was .58.


                                      -11-
<PAGE>

Item 5.   Market for Common Equity and Related Stockholder Matters (continued)

          Dividends

          The Company has not paid any cash dividends on its common stock during
          the last five (5) fiscal years. At present, the Company does not
          anticipate issuing any cash dividends on its common stock in the
          foreseeable future by reason of its contemplated future financial
          requirements and business plans. The Company will retain earnings, to
          the extent that there are any, to finance the development of its
          business.

          Approximated Number of Equity Security Holders

          The number of record holders of the Company's common stock as of May
          21, 2005 was approximately 1,208. Such number of record owners was
          determined from the Company's stockholder records, and does not
          include the beneficial owners of the Company's common stock whose
          shares are held in the names of various security holders, dealers and
          clearing agencies.


Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

          Statements contained in this report, which are not historical facts
          may be considered forward looking information with respect to plans,
          projections, or future performance of the Company as defined under the
          Private Securities litigation Reform Act of 1995. These
          forward-looking statements are subject to risks and uncertainties,
          which could cause actual results to differ materially form those
          projected. The words "anticipate," "believe", "estimate", "expect,"
          "objective," and "think" or similar expressions used herein are
          intended to identify forward-looking statements. The forward-looking
          statements are based on the Company's current views and assumptions
          and involve risks and uncertainties that include, among other things,
          the effects of the Company's business, actions of competitors, changes
          in laws and regulations, including accounting standards, employee
          relations, customer demand, prices of purchased raw material and
          parts, domestic economic conditions, including housing starts and
          changes in consumer disposable income, and foreign economic
          conditions, including currency rate fluctuations. Some or all of the
          facts are beyond the Company's control.

          The following discussion and analysis should be read in conjunction
          with the financial statements and related footnotes, which provide
          additional information concerning the Company's financial activities
          and condition.

          Critical Accounting Policies

          The Financial Statements have been prepared in accordance with
          accounting principles generally accepted in the United States of
          America, which require the Company to make estimates and assumptions
          that affect the reported amounts of assets and liabilities at the date
          of the Financial Statements, and revenues and expenses during the
          periods reported. Actual results could differ from those estimates.
          The Company believes the following are the critical accounting
          policies, which could have the most significant effect on the
          Company's reported results and require the most difficult, subjective
          or complex judgments by management.


                                      -12-
<PAGE>

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results Of Operations (continued)

          o    Impairment of Long-Lived Assets:
               The Company reviews its long-lived assets for impairment whenever
               events or circumstances indicate that the carrying amount of an
               asset may not be recoverable. If the sum of the expected cash
               flows, undiscounted and without interest, is less than the
               carrying amount of the asset, an impairment loss is recognized as
               the amount by which the carrying amount of the asset exceeds its
               fair value. The Company makes estimates of its future cash flows
               related to assets subject to impairment review.

          o    Inventory Valuation:
               Raw materials and supplies are valued at the lower of first-in,
               first-out cost or market. Finished goods and work in process are
               valued at the lower of actual cost, determined on a specific
               identification basis, or market. The Company estimates which
               materials may be obsolete and which products in work in process
               or finished goods may be sold at less than cost, and adjusts
               their inventory value accordingly. Future periods could include
               either income or expense items if estimates change and for
               differences between the estimated and actual amount realized from
               the sale of inventory.

          o    Income Taxes:
               The Company records a liability for potential tax assessments
               based on its estimate of the potential exposure. Due to the
               subjectivity and complex nature of the underlying issues, actual
               payments or assessments may differ from estimates. Income tax
               expense in future periods could be adjusted for the difference
               between actual payments and the Company's recorded liability
               based on its assessments and estimates.

          o    Revenue Recognition:
               Revenues are recognized at the shipping date of the Company's
               products. The Company has historically adopted the shipping terms
               that title merchandise passes to the customer at the shipping
               point (FOB Shipping Point). At this juncture, title has passed,
               the Company has recognized the sale, inventory has been relieved,
               and the customer has been invoiced. The Company does not offer
               any discounts, credits or other sales incentives.

               The Company's policy with respect to customer returns and
               allowances as well as product warranty is as follows:

               The Company will accept a return of defective product within one
               year from shipment for repair or replacement at the Company's
               option. If the product is repairable, the Company at its own cost
               will repair and return it to the customer. If unrepairable, the
               Company will either offer an allowance against payment or will
               reimburse the customer for the total cost of the product.

               Most of the Company's products are custom ordered by customers
               for a specific use. The Company provides engineering services as
               part of the relationship with its customers in developing the
               custom product. The Company is not obligated to provide such
               engineering service to its customers. The Company does not charge
               separately for these services.


                                      -13-
<PAGE>

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results Of Operations (continued)

          o    Research & Development

               The Company provides personalized engineering services to its
               customers by designing connectors for specific customer
               applications. The employment of electromechanical engineers is
               the anticipated cornerstone of the Company's future growth. The
               Company maintains a testing laboratory where its engineers
               experiment with new connector designs based on changes in
               technology and in an attempt to create innovative, more efficient
               connector designs.

               The Company expended $31,000 and $49,500 for the years ended
               March 25, 2005 and March 26, 2004, respectively, on Company
               sponsored research and development activities relating to the
               development of new designs, techniques and the improvement of
               existing designs. In addition, the Company received $31,000 in
               revenues for the year ended March 25, 2005 and $49,000 for the
               year ended March 26, 2004, respectively, pursuant to customer
               sponsored research activities.

          Results of Operations

          The following table sets forth for the periods indicated, percentages
          for certain items reflected in the financial data as such items bear
          to the revenues of the Company:

                         Relationship to Total Revenues
                                                           March 25,   March 26,
                                                             2005        2004
                                                           --------    --------

          Operating Revenues (in thousands)                $  5,321    $  4,893
                                                           --------    --------

          Operating Expenses:
            (as a percentage of Operating Revenues)

                    Costs of Products Sold                     71.8%       71.6%
                      Selling, General and Administrative      19.3%       19.6%
                      Interest Expense                          2.0%        2.2%
                      Depreciation and amortization             3.3%        4.2%
                                                           --------    --------

                             TOTAL COSTS AND EXPENSES          96.4%       97.6%
                                                           --------    --------

          Operating Income (loss)                               3.6%        2.4%

          Other Income                                           --          --
                                                           --------    --------

          Income (loss) before Income Taxes                     3.6%        2.4%

          Income Taxes                                           .5%         .1%
                                                           --------    --------

          Net Income (loss)                                     3.1%        2.3%
                                                           ========    ========


                                      -14-
<PAGE>

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results Of Operations (continued)

          Results of Operations (continued)

          Year End Results: March 25, 2005 vs. March 26, 2004

          Operating revenues for the year ended March 25, 2005 amounted to
          $5,321,269 reflecting an 8.8% increase versus the year ended March 26,
          2004 revenues of $4,892,755. The increase in revenues is a direct
          result of an increase in commercial sales.

          The Company is primarily a manufacturer and its products are
          essentially basic components of larger assemblies of finished goods.
          Approximately 92% and 93% of the Company's net sales for the fiscal
          year ended March 25, 2005 and March 26, 2004 respectively were made
          directly to manufacturers of finished products with the balance of the
          Company's products sold to distributors. Distributors often purchase
          connectors for customers who do not require large quantities of
          connectors over a short period of time but rather require small
          allotments of connectors over an extended period of time.

          For the fiscal year ended March 25, 2005, one of the Company's
          customers accounted for approximately 34% of total sales. The same
          customer accounted for approximately 21% of sales in the fiscal year
          ended March 26, 2004.

          The Company currently employs 14 independent sales representatives to
          market its products in all regions of the United States. These sales
          representatives accounted for approximately 94% of the Company's
          sales, with the balance of sales being generated by direct customer
          contact.

          For the fiscal year ended March 25, 2005, the Company's principal
          customers included manufacturers of commercial electronic products,
          military defense contractors and distributors who service these
          markets. Sales to the commercial electronic and military defense
          markets comprised 24% and 75% of the Company's net sales for the year
          ended March 25, 2005 and 22% and 77% for the year ended March 26, 2004
          respectively. Approximately 1% of net sales were made to international
          customers.

          Cost of products sold amounted to $3,819,234 for the fiscal year ended
          March 25, 2005, or 71.8% of operating revenues. This reflected a
          $317,625 or 9.1% increase in the cost of products sold from $3,501,609
          or 71.6% of operating revenues for the fiscal year ended March 26,
          2004. This increase is due primarily to the increased cost of
          production associated with the sales increase.

          Selling, general and administrative expenses were $1,027,222 and
          $957,952 or 19.3% and 19.6% of operating revenues for the fiscal years
          ended March 25, 2005 and March 26, 2004, respectively. This category
          of expense increased by $69,270 or 7.2% from the prior year. The
          increase can be attributed to an increase in sales salaries,
          commissions and travel.

          Interest expense was $104,185 for the fiscal year ended March 25, 2005
          or 2.0% of operating revenues. For the fiscal year ended March 26,
          2004, interest expense was $105,661 or 2.2% of operating revenues. The
          decrease of $1,476 or 1.4% reflects the liquidation of a significant
          amount of the Company's notes payable.


                                      -15-
<PAGE>

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations (continued)

          Results of Operations (continued)

          Year End Results: March 25, 2005 vs. March 26, 2004

          Depreciation and amortization of $177,504 or 3.3% of operating
          revenues was reported for the fiscal year ended March 25, 2005. This
          reflects a decrease of $26,146 from the prior year ended March 26,
          2004 of $203,650 or 4.2% of operating revenues. The decrease is due
          primarily to a significant amount of capital assets being fully
          depreciated.

          The Company reported net income of $166,484 for the year ended March
          25, 2005 representing basic earnings of $.07 per share as compared to
          net income of $118,423 or $.05 per share for the year ended March 26,
          2004. The increase in net income for the current year can be
          attributed primarily to the reported increase in commercial sales.

          Liquidity and Capital Resources

          The Company reported working capital of $1,283 as of March 25, 2005
          compared to a working capital deficit of $31,991 as of March 26, 2004.
          The increase in working capital of $33,274 was attributable to the
          following items:

               Net income                             $ 166,484
               Depreciation and amortization            177,504
               Capital expenditures                    (219,911)
               Other transactions                       (90,803)

          As a result of the above, the current ratio (current assets to current
          liabilities) was 1 to 1 at March 25, 2005 as compared to .98 to 1 at
          March 26, 2004. Current liabilities at March 25, 2005 were $2,026,588
          compared to $1,654,176 at March 26, 2004.

          The Company reported $219,911 in capital expenditures for the year
          ended March 25, 2005 and reported depreciation of $177,504 for the
          year ended March 25, 2005.

          The net income of $166,484 for the year ended March 25, 2005 resulted
          in an increase in stockholders' equity to $1,145,705 as compared to
          stockholders' equity of $979,221 at March 26, 2004.

          The Company has an accounts receivable financing agreement with a
          factor, which bears interest at 2.5% above prime with a minimum of 12%
          per annum. At March 25, 2005 the amount outstanding with the factor
          was $643,472 as compared to $645,096 at March 26, 2004. The loan is
          secured by the Company's accounts receivables and inventories. The
          factor provides discounted funds based upon the Company's accounts
          receivables, these funds provide the primary source of working capital
          for operations.

          In the past two fiscal years, management has been reviewing its
          collection practices and policies for outstanding receivables and has
          revised its collection procedures to a more aggressive collection
          policy. As a consequence of this new policy the Company's experience
          is that its customers have been remitting payments on a more
          consistent and timely basis. The Company reviews the collectability of
          all accounts receivable on a monthly basis. The reserve is less than
          2% of average gross accounts receivable and is considered to be
          conservatively adequate.


                                      -16-
<PAGE>

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations (continued)

          Liquidity and Capital Resources (continued)

          During the year ended March 26, 2004, two of the Company's officers
          loaned the Company a total of $52,000 on a non-interest bearing basis.
          The Company used these funds as a source of additional working
          capital.

          During the year ended March 25, 2005, one of these officers loaned the
          Company an additional $135,744 on a non-interest bearing basis as
          well. These funds were also used by the Company for working capital
          requirements.

          As of March 25, 2005, the amount owed to these officers was $187,744.

          Through the period ended June 24, 2005, the Company had repaid $36,244
          of the total funds loaned to it.

          The Company has a collective bargaining multi-employer pension plan
          with the United Auto Workers of America, Local 259. Contributions are
          made in accordance with a negotiated labor contract and are based on
          the number of covered employees employed per month. With the passage
          of the Multi-Employer Pension Plan Amendments Act of 1990 ("The Act"),
          the Company may become subject to liabilities in excess of
          contributions made under the collective bargaining agreement.
          Generally, these liabilities are contingent upon the termination,
          withdrawal, or partial withdrawal from the Plan. The Company has not
          taken any action to terminate, withdraw or partially withdraw from the
          Plan nor does it intend to do so in the future. Under the Act,
          liabilities would be based upon the Company's proportional share of
          the Plan's unfunded vested benefits, which is currently not available.
          The amount of accumulated benefits and net assets of such Plan also is
          not currently available to the Company. The total contributions
          charged to operations under this pension plan were $54,643 for the
          year ended March 25, 2005 and $47,519 for the year ended March 26,
          2004.

          As of March 25, 2005, the Company had satisfied the arrears on the
          Union's Health and Welfare Plan.

          On June 30, 1995, the Company applied to the Pension Benefit Guaranty
          Corporation ("PBGC") to have the PBGC assume all of the Company's
          responsibilities and liabilities under its Salaried Pension Plan. On
          April 26, 1996, the PBGC determined that the Salaried Pension Plan did
          not have sufficient assets available to pay benefits, which were and
          are currently due under the terms of the Plan.

          The PBGC further determined that pursuant to the provisions of the
          Employment Retirement Income Security Act of 1974, as amended
          ("ERISA") that the Plan must be terminated in order to protect the
          interests of the Plan's participants. Accordingly, the PBGC proceeded
          pursuant to ERISA to have the Plan terminated and the PBGC appointed
          as statutory trustee, and to have July 31, 1995 established as the
          Plan's termination date.

          The Company and the PBGC agreed to the terms of a settlement of the
          matter. The agreement is effective July 2, 2001. Under the agreement,
          the Company and the PBGC agreed on a total sum of $244,000. The
          Company has agreed to make payments as follows:


                                      -17-
<PAGE>

Item 6.  Management's Discussion And Analysis Of Financial Conditions And
         Results Of Operations (continued)

         Liquidity And Capital Resources (continued)

           September 1, 2003 to August 1, 2004       $2,000 per month
           September 1, 2004 to August 1, 2006       $3,000 per month
           September 1, 2006 to August 1, 2007       $4,000 per month

          Additionally, the Company has made balloon payments of $25,000 each on
          January 1, 2004, May 1, 2004 and May 1, 2005. The Company is also
          obligated to make an additional balloon payment of $25,000 on January
          1, 2006.

          The Company also granted the PBGC a lien on the Company's machinery
          and equipment.

          As a result of this agreement the amount due the PBGC was restated to
          $244,000. $56,000 was paid during the year ended March 25, 2005 and
          $39,000 was paid during the year ended March 26, 2004. The balance of
          $149,000 is reported as follows: $86,000 as a current liability and
          $63,000 as a long-term liability.

          On September 21, 2001 the Company's shareholders approved the adoption
          of the Company's 2002 Employees Stock Option Plan to provide for the
          grant of options to purchase up to 750,000 shares of the Company's
          common stock to all employees, including senior management. No options
          have been granted under the Employee Option Plan to date.

          Options granted to employees under this plan may be designated as
          options which qualify for incentive stock option treatment under
          Section 422A of the Internal Revenue Code, or option which do not so
          qualify. Under this plan, the exercise price of an option designated
          as an Incentive Stock Option shall not be less than the fair market
          value of the Company's common stock on the day the option is granted.

          In the event an option designated as an incentive stock option is
          granted to a ten percent (10%) share holder, such exercise price shall
          be at least 110 Percent (110%) of the fair market value or the
          Company's common stock and the option must not be exercisable after
          the expiration of five years from the day of the grant. Exercise
          prices of non-incentive stock options may be less than the fair market
          value of the Company's common stock. The aggregate fair market value
          of shares subject to options granted to its participants, which are
          designated as incentive stock options, and which become exercisable in
          any calendar year, shall not exceed $100,000. As of March 25, 2005 no
          options had been granted under the plan.

          In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
          Executive Officers. Contributions to the Bonus Plan are made by the
          Company only after pre-tax operating profits exceed $150,000 for a
          fiscal year, and then to the extent of 10% of the excess of the
          greater of $150,000 or 25% of pre-tax operating profits. There were no
          contributions to the Bonus Plan for the fiscal year ended March 26,
          2004. For the year ended March 26, 2005 the contribution was $4,188.


                                      -18-
<PAGE>

                                 IEH CORPORATION
                                     PART II

          Effects of Inflation

          The Company does not view the effects of inflation to have a material
          effect upon its business. Increases in costs of raw materials and
          labor costs have been offset by increases in the price of the
          Company's products, as well as reductions in costs of production,
          reflecting management's efforts in this area. While the Company has in
          the past increased its prices to customers, it has maintained its
          relatively competitive price position. However, significant decreases
          in government and military subcontractor spending, has provided excess
          production capacity in the industry, which in turn has tightened
          pricing margins.

          Off Balance Sheet Arrangements

          The Company does not have any off balance sheet arrangements within
          the meaning of Item 303 of Regulation S-B.

Item 7.   Financial Statements

          See Index to Financial Statements attached hereto are financial
          statements appearing at pages 28 to 46.

Item 8A.  Controls and Procedures

          Evaluation of Disclosure Controls and Procedures:

          Our management, under the supervision and with the participation of
          our Chief Executive Officer and Controller, conducted an evaluation of
          our "disclosure controls and procedures" (as defined in the Securities
          Exchange Act of 1934 Rules 13a-14(c)) within 90 days of the filing
          date of this Report on Form 10-KSB. Based on their evaluation, our
          chief executive officer and controller have concluded that as of the
          end of the period covered by this Form 10KSB, our disclosure controls
          and procedures are effective to ensure that all material information
          required to be filed in this Report on Form 10-KSB has been made known
          to them. Our Chief Financial Officer and Controller is our principal
          accounting officer.

          There have been no changes, including corrective actions with regard
          to significant deficiencies or material weaknesses in our internal
          controls or in other factors that have materially affected or could
          significantly or materially affect these controls subsequent to the
          Evaluation Date set forth above. In addition, historically, the
          Company has relied upon the entire Board of Directors in appointing
          the Company's independent auditors and reviewing the financial
          condition and statements of the Company. Given the relatively small
          size of the Company's operations and revenues, the Board has not
          believed that appointing an independent committee was a necessity.

          Additionally, in response to the passage of the Sarbanes-Oxley Act of
          2002, our Board of Directors and management have adopted a Code of
          Ethics and have instituted a periodic review by members of our
          management team to assist and guide the disclosure process. The Board
          has also determined to periodically review and develop policies and
          procedures to enhance our disclosure controls and procedures as well
          as with reviewing our periodic reports and other public disclosures.

Item 8B.  Other Information

Not applicable


                                      -19-
<PAGE>

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16 (a) of the Exchange Act

          The executive officers and directors of the Company are as follows:

                Name          Age                   Office

          Michael Offerman     64     Chairman of the Board of Directors and
                                      President

          Robert Knoth         63     Secretary, Controller and Treasurer
                                      (Principal Accounting Officer)

          Murray Sennet        82     Director

          Allen Gottlieb       64     Director


          All directors serve for a term of two years and until their successors
          are duly elected. All officers serve at the discretion of the Board of
          Directors.

          Executive Officers and Directors

          Michael Offerman has been a member of the Board of Directors since
          1973. In May 1987, Mr. Offerman was elected President of the Company
          and has held that position since that date. Prior to his becoming
          President, Mr. Offerman served as Executive Vice-President of the
          Company.

          Robert Knoth joined the Company as Controller in January 1990 and was
          elected treasurer of the Company in March 1990. Mr. Knoth was elected
          as Secretary of the Company in September 1992 and Mr. Knoth has held
          these positions since said dates. From 1986 to January 1990, Mr. Knoth
          was employed as controller by G&R Preuss, Inc., a company engaged in
          the business of manufacturing truck bodies and accessories. Mr. Knoth
          serves as our principal accounting officer

          Murray Sennet has been a member of the Company's Board of Directors
          since 1970. Mr. Sennet was the Secretary and the Treasurer of the
          Company at the time of his retirement in April 1986.

          Allen Gottlieb has been a member of the Company's Board of Directors
          since 1992. Mr. Gottlieb has been an attorney in private practice for
          over five (5) years.

          Significant Employees

          Joan Prideaux joined the Company in July 1995 as National Sales
          Manager. Prior to such time Ms. Prideaux was employed as an account
          executive of Viking Connectors for the previous five years.

          Mark Iskin is the Director of Purchasing, a position he has held since
          September 2000. Prior to joining the Company, Mr. Iskin worked as a
          materials and purchasing specialist, in manufacturing and distribution
          companies. In his last position with an industrial distributor, Mr.
          Iskin was responsible for purchasing and managing vendors for the
          cutting tool section of the catalog. In addition he participated in
          setting up and developing the company's forecasting/planning software
          related to that department procedures.


                                      -20-
<PAGE>

          Jeff (Yefim) Berenstein is the quality control manager, a position he
          started on April 16, 2002. Prior to joining the Company Mr. Berenstein
          worked as a quality assurance specialist for various manufacturing
          companies where he was responsible for the implementation of quality
          systems - ISI-9000, Mil-I-45208A writing quality manuals, quality
          procedures, work instructions, design special gigs, testing equipment
          to improve quality of the manufacturing products, maintaining and
          supervising calibration and calibration recall systems.

          Certain Reports

          Section 16(a) of the Securities Exchange Act of 1934 requires the
          Company's directors and officers and persons who own, directly or
          indirectly, more than 10% of a registered class of the Corporation's
          equity securities, to file with the Securities and Exchange Commission
          ("SEC") reports of ownership and reports of changes in ownership of
          Common Stock of the Corporation.

          Officers, directors and greater than 10% shareholders are required to
          furnish the Company with copies of all Section 16(a) reports that they
          file. Based solely on review of the copies of such reports received by
          the Company, the Company believes that filing requirements applicable
          to officers, directors and 10% shareholders were complied with during
          the fiscal year.




                                      -21-
<PAGE>

Item 10.  Executive Compensation

          The following table sets forth below the summary compensation paid or
          accrued by the Corporation during the fiscal years ended March 25,
          2005, March 26, 2004, and March 30, 2003 for the Corporation's Chief
          Executive Officer:

<TABLE>
<CAPTION>
                                                                                Other Annual
          Name and Principal Position               Year        Salary   Bonus  Compensation
          ----------------------------------   --------------  --------  -----  ------------
          <S>                                  <C>             <C>      <C>      <C>
          Michael Offerman, Chief Executive
          officer, President (1)               March 25, 2005  $ 96,235  1,424        0
                                               March 26, 2004    95,500    -          0
                                               March 28, 2003    95,500    -          0
</TABLE>

          (1)  During the years ended March 25, 2005, March 26, 2004 and March
               28, 2003, the Corporation provided automobile allowances to Mr.
               Offerman. This does not include the aggregate incremental cost to
               the Corporation of such automobile or automobile allowances. The
               Corporation is unable to determine without unreasonable effort
               and expense the specific amount of such benefit, however, the
               Corporation has concluded that the aggregate amounts of such
               personal benefit for Mr. Offerman does not exceed $25,000 or 10%
               of the compensation reported as total salary and bonus reported.

          (2)  There are no employment agreements between the Company and
               members of its senior management, including the Chief Executive
               Officer, Michael Offerman.

          No other officer of the Corporation received compensation (salary and
          bonus) in excess of $100,000 during the fiscal years ended March 25,
          2005 or March 26, 2004

          Pension/Benefit Incentive Plan

          In 1964, the Corporation's Shareholders and Board of Directors adopted
          a contributory pension plan (the "Salaried Pension Plan") effective
          April 1, 1964, for salaried employees of the Corporation. The Salaried
          Pension Plan as revised on April 1, 1987, provides for retirement
          benefits for qualified employees upon or prior to retirement.

          For early retirement, employees are eligible to receive a portion of
          their retirement benefits, starting 10 years prior to the employees
          anticipated normal retirement age (age 65), if the employee has
          completed 15 years of service to the Corporation. The employee is
          eligible to receive reduced retirement benefits based on an actuarial
          table for a period not exceeding ten (10) years of his lifetime. In no
          event would benefits exceed $12,000 per year.

          For normal retirement at the age of sixty-five (65) the employee is
          entitled to receive full retirement benefits for a period not
          exceeding ten (10) years of his lifetime. If the employee should die
          prior to the ten-year period, his beneficiaries will continue to
          receive the full benefit for the remainder of the ten-year term. In no
          event will benefits exceed $12,000 per year.


                                      -22-
<PAGE>

                                 IEH CORPORATION

                                    PART III

Item 10.  Executive Compensation (continued)

          Pension/Benefit Incentive Plan (continued)

          If payment is made on the "joint and survivor basis" as elected by the
          employee, benefits will be provided to both the employee and spouse on
          a reduced basis over the life of both the employee and his spouse. If
          the employee should die prior to the guaranteed ten year period, the
          spouse will receive the employee benefit for the remainder of the
          term, after which, the spouse will received the reduced spousal
          benefit for the life of the spouse. In no event will the benefits
          pursuant to the joint and survivor basis exceed $12,000 per year.

          On June 30, 1995, the Company applied to the Pension Benefit Guaranty
          Corporation ("PBGC") to have the PBGC assume all of the Company's
          responsibilities and liabilities under its Salaried Pension Plan. On
          April 26, 1996, the PBGC determined that the Salaried Pension Plan did
          not have sufficient assets available to pay benefits, which were and
          are currently due under the terms of the Plan.

          The PBGC further determined that pursuant to the provisions of the
          Employment Retirement Income Security Act of 1974, as amended
          ("ERISA"), that the Plan must be terminated in order to protect the
          interests of the Plan's participants. Accordingly, the PBGC proceeded
          pursuant to ERISA to have the Plan terminated and the PBGC appointed
          as statutory trustee, and to have July 31, 1995 established as the
          Plan's termination date.

          The Company and the PBGC negotiated a settlement on the entire matter
          and on July 2, 2001, an agreement was reached whereby the Company's
          liability to the PBGC was reduced to $244,000. The Company will make
          monthly payments to the PBGC as follows:

            September 1, 2003 to August 1, 2004       $2,000 per month
            September 1, 2004 to August 1, 2006       $3,000 per month
            September 1, 2006 to August 1, 2007       $4,000 per month

          Additionally, the Company has made balloon payments of $25,000 each on
          January 1, 2004, May 1, 2004 and May 1, 2005. The Company is also
          obligated to make an additional balloon payment of $25,000 on January
          1, 2006.

          The Company also granted the PBGC a lien on the Company's machinery
          and equipment.


                                      -23-
<PAGE>

Item 10.  Executive Compensation (continued)

          Pension/Benefit Incentive Plan (continued)

          As a result of this agreement the amount due the PBGC was restated to
          $244,000. $56,000 was paid during the year ended March 25, 2005 and
          $39,00 was paid during the year ended March 26, 2004. The balance of
          $149,000 is reported as follows: $86,000 as a current liability and
          $63,000 as a long-term liability.

          Cash Bonus Plan

          In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
          Executive Officers. Contributions to the Bonus Plan are made by the
          Company only after pre-tax operating profits exceed $150,000 for a
          fiscal year, and then to the extent of 10% of the excess of the
          greater of $150,000 of 25% of pre-tax operating profits. There were no
          contributions to the Bonus Plan for the fiscal year ended March 26,
          2004. For the year ended March 25, 2005 the contribution was $4,188.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth certain information as of July 5, 2004 with
respect to (i) the persons (including any "group" as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934), known by the Company
to be the beneficial owner of more than five percent (5%) of any class of the
Company's voting securities; (ii) each Executive Officer and Director who owns
Common Stock in the Company; and (iii) all Executive Officers and Directors as a
group. As of July 5, 2005, there were 2,303,468 shares of Common Stock issued
and outstanding.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                                  Amount of and
                                                                    Nature of
                                   Name and Address of              Beneficial
Title of Class                     Beneficial Owner                 Ownership        Percentage of Class
--------------------------------------------------------------------------------------------------------
<S>                                 <C>                               <C>                     <C>
Common Stock                       Michael Offerman                  946,784                 41%
$.01 Par Value                     140 58th Street
                                   Brooklyn, NY 11220(1)
--------------------------------------------------------------------------------------------------------
                                   Murray Sennet                      24,500                1.1%
                                   1900 Manor Lane
                                   Plano, TX 75093
--------------------------------------------------------------------------------------------------------
                                   Allen Gottlieb                          0                  0
                                   325 Coral Way
                                   Ft. Lauderdale, FL 33301
--------------------------------------------------------------------------------------------------------
                                   Robert Pittman (2)                 20,000                  *
                                   45 Ocean Avenue
                                   Monmouth Beach
                                   NJ 07750
--------------------------------------------------------------------------------------------------------
                                   Robert Knoth
                                   c/o 140 58th Street
                                   Brooklyn, New York 11220              400                   *
--------------------------------------------------------------------------------------------------------
All Officers & Directors as a Group
(5 in number)                                                        991,684                 43%
--------------------------------------------------------------------------------------------------------
</TABLE>


                                      -24-
<PAGE>

----------------------
          * Less than 1%.

1.   43,600 shares of Common Stock are jointly owned by Mr. Offerman and his
     wife, Gail Offerman.

2.   Mr. Pittman is now deceased and the shares are owned by his estate.

All shares set forth above are directly by the named individual unless otherwise
stated.

Item 12.   Certain Relationships and Related Transactions

     Other than the employment terms for its executive officers as described
elsewhere in this Form 10-KSB, and as described below, there have been no
related transactions between the Company, officers, directors or shareholders
holding in excess of 5% of its securities within the last three years.

     During the year ended March 26, 2004, two of the Company's officers,
(Michael Offerman, the Chief Executive Officer and Robert Knoth the principal
accounting officer) loaned the Company a total of $52,000 on a non-interest
bearing basis. The Company used these funds as a source of additional working
capital.

     During the year ended March 25, 2005, Mr. Robert Knoth loaned the Company
an additional $135,744 on a non-interest bearing basis as well. These funds were
also used by the Company for working capital requirements. As of March 25, 2005,
the amount owed to these officers was $187,744. Through the period ended June
24, 2005, the Company had repaid $36,244 of the total funds loaned to it.

Item 13.   Exhibits

Exhibits filed with Form 10-KBS:

          31.1 Certification of Chief Executive Officer pursuant to Section17
          CFR 240.13a-14(a) or 17 CFR 240.15d-14(a).

          31.2 Certification of Principal Accounting Officer pursuant to
          Section17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a).

          32.1 Certification by Michael Offerman, President pursuant to 17 CFR
          240.13a-14(b) or 17 CFR 240.15d-14(b) and Section 1350 of Chapter 63
          of Title 18 of the United States Code.

          32.2 Certification by Robert Knoth, Chief Financial Officer pursuant
          to 17 CFR 240.13a-14(b) or 17 CFR 240.15d-14(b) and Section 1350 of
          Chapter 63 of Title 18 of the United States Code.

Item 14.  Principal Accountant Fees and Services

          The Board of Directors of IEH has selected Jerome Rosenberg, Certified
          Public Accountant, P.C. as the independent auditor of IEH for the
          fiscal year ending March 25, 2005. Shareholders are not asked to
          approve such selection because such approval is not required. The
          audit services provided by Jerome Rosenberg, CPA P.C. consist of
          examination of financial statements, services relative to filings with
          the Securities and Exchange Commission, and consultation in regard to
          various accounting matters. Jerome Rosenberg, CPA P.C. or a member of
          the firm is expected to be present at the next meeting of


                                      -25-
<PAGE>

          shareholders, will have the opportunity to make a statement if he so
          desires, and will be available to respond to appropriate questions.

          Audit Fees. During the fiscal year ended March 25, 2005 and March 26,
          2004, IEH paid an aggregate of $27,000 and $27,000, respectfully, to
          Jerome Rosenberg, CPA P.C. for fees related to the audit of its
          financial statements.

          Audit Related Fees. During the fiscal years ended March 25, 2005 and
          March 26, 2004 no fees were paid to Jerome Rosenberg, CPA P.C. with
          respect to financial systems design or implementation.

          Tax Fees. During the fiscal years ended march 25, 2005 and March 26,
          2004 , the Company paid to Jerome Rosenberg CPA P.C. the sums of
          $3,000 and $3,000 for tax compliance, tax advice and tax planning
          services.

          All Other Fees. During the fiscal year ended March 25, 2005, IEH did
          not pay any other fees for services to its auditor.

               The Board of Directors has determined that the services provided
          by Jerome Rosenberg, CPA P.C. and the fees paid to it for such
          services during the fiscal year ended March 25, 2005 has not
          compromised the independence of Jerome Rosenberg, CPA P.C.

               The Board of Directors of the Company is comprised of three
          persons. Due to the limited size and scope of the Company's operations
          which are limited to one office and the level of revenue and income,
          the Board of Directors has not established an Audit Committee.
          Further, as the Company's securities are not traded on any exchange or
          on Nasdaq, but solely are listed for quotations on the Over the
          Counter Bulletin Board, there is no requirement that an Audit
          Committee be established. The Board, as an entirety, approves that
          appointment of its independent auditor and the related work performed
          by the auditor for services which are not audit related. In its
          deliberations regarding approval of the independent auditor for
          auditing and other services, the Board reviews the auditor's history
          of representing the Company, the fees to be paid and paid
          historically, the level of performance provided by the auditor and the
          ability of the Company, given its lack of profits to obtain similar
          services for similar costs.

               Consistent with SEC policies regarding auditor independence, the
          Board of Directors has responsibility for appointing, setting
          compensation and overseeing the work of the independent auditor. In
          recognition of this responsibility, the Board has established a policy
          to pre-approve all audit and permissible non-audit services provided
          by the independent auditor. Prior to engagement of the independent
          auditor for the next year's audit, management advises the Board of the
          audit and permissible non-audit services expected to be rendered
          during that year for each of the categories of services which may
          provided by the independent auditor to the Board for approval. The
          primary categories of services expected to be provided by the
          independent auditor are as described in the fee table set forth above.
          In addition, management will also provide to the Board for its
          approval a fee proposal for the services proposed to be rendered by
          the independent auditor. Prior to the engagement of the independent
          auditor, the Board will approve both the description of audit and
          permissible non-audit services proposed to be rendered by the
          independent auditor and the budget for all such services. The fees are
          budgeted and the Board requires the independent auditor and management
          to report actual fees versus the budget periodically throughout the
          year by category of service.

               During the year, circumstances may arise when it may become
          necessary to engage the independent auditor for additional services
          not contemplated in the original pre-approval. In those instances, the
          Board requires separate pre-approval before engaging the independent
          auditor.


                                      -26-
<PAGE>

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                              IEH CORPORATION

                                              By: /s/ Michael Offerman
                                                  ---------------------------
                                                  Michael Offerman, President
Dated: July 7, 2005

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


/s/    Michael Offerman                                          July 7, 2005
----------------------------------------
Michael Offerman, Chairman of the
Board and President

/s/  Robert Knoth                                                July 7, 2005
----------------------------------------
Robert Knoth, Secretary and
Treasurer  and Chief Financial Officer
Principal Accounting Officer

/s/   Murray Sennet                                              July 7, 2005
----------------------------------------
Murray Sennet, Director

/s/ Alan Gottlieb                                                July 7, 2005
----------------------------------------
Alan Gottlieb, Director


                                      -27-
<PAGE>

<TABLE>
<CAPTION>

                                         IEH Corporation

                                             Contents

                                March 25, 2005 and March 26, 2004


                                                                                          Page
                                                                                         Number
                                                                                         ------
<S>                                                                                        <C>
Report of Independent Registered Public Accounting Firm                                    29

Financial Statements:

         Balance Sheets as of March 25, 2005 and March 26, 2004                            30

         Statement of Operations for the twelve months ended March 25, 2005
            and March 26, 2004                                                             32

         Statement of Stockholders' Equity as of March 25, 2005 and March 26, 2004         33

         Statement of Cash Flows for the years ended March 25, 2005 and March 26, 2004     34

Notes to Financial Statements                                                              36

</TABLE>



                                      -28-
<PAGE>


             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------


Board of Directors
IEH Corporation

We have audited the accompanying balance sheets of IEH Corporation as of March
25, 2005 and March 26, 2004 and the related statements of operations,
stockholders' equity, and cash flows for each of the two years in the period
ended March 25, 2005 and March 26, 2004. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based upon our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IEH Corporation as of March 25,
2005 and March 26, 2004 and the results of its operations and its cash flows for
each of the two years ended March 25, 2005 and March 26, 2004 in conformity with
U.S. generally accepted accounting principles.



                                                  Jerome Rosenberg, CPA, P.C.
                                                      Melville, New York
                                                        June 10, 2005




                                      -29-
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     As of March 25, 2005 and March 26, 2004
<TABLE>
<CAPTION>
                                                                      March 25,      March 26,
                                                                        2005           2004
                                                                     ----------     ----------
<S>                                                                  <C>            <C>
                                     ASSETS

CURRENT ASSETS:
Cash                                                                 $   25,154     $    4,480
Accounts receivable, less allowances for doubtful accounts
   of $10,062 at March 25, 2005 and March 26, 2004                      769,402        586,491
Inventories (Note 2)                                                  1,219,103      1,014,598
Prepaid expenses and other current assets (Note 3)                       14,212         16,616
                                                                     ----------     ----------

          Total current assets                                        2,027,871      1,622,185
                                                                     ----------     ----------


PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation and
   amortization of $6,169,269 at March 25, 2005
   and $5,991,765at March 26, 2004 (Note 4)                           1,172,433      1,130,026
                                                                     ----------     ----------
                                                                      1,172,433      1,130,026
                                                                     ----------     ----------

OTHER ASSETS:
  Other assets                                                           41,562         41,356
                                                                     ----------     ----------
                                                                         41,562         41,356
                                                                     ----------     ----------

Total assets                                                         $3,214,866     $2,793,567
                                                                     ==========     ==========
</TABLE>


    The accompanying notes and independent auditors' report should be read in
                    conjunction with the financial statements


                                      -30-
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     As of March 25, 2005 and March 26, 2004
<TABLE>
<CAPTION>
                                                                                March 25,       March 26,
                                                                                  2005            2004
                                                                               -----------    -----------
                                                                                                (Note 1)
                 LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                           <C>            <C>
CURRENT LIABILITIES:
Accounts receivable financing (Note 5)                                         $   643,472    $   645,096
Notes payable, equipment, current portion (Note 7)                                   4,325          8,936
Loans payable- officers (Note 8)                                                   187,744         52,000
Accrued corporate income taxes                                                      28,287         14,500
Union health & welfare, current portion (Note 14)                                       --         32,200
Accounts payable                                                                   882,646        738,105
Pension plan payable, current portion (Note 10)                                     86,000         56,000
Other current liabilities (Note 6)                                                 194,114        107,339
                                                                               -----------    -----------

          Total current liabilities                                              2,026,588      1,654,176
                                                                               -----------    -----------

LONG-TERM LIABILITIES:
Pension Plan payable, less current portion (Note 10)                                63,000        149,000
Notes payable, equipment, less current portion (Note 7)                              6,573         11,170
                                                                               -----------    -----------
          Total long-term liabilities                                               69,573        160,170
                                                                               -----------    -----------

          Total liabilities                                                      2,096,161      1,814,346
                                                                               -----------    -----------

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 10,000,000 shares authorized; 2,303,468 shares
   issued and outstanding at March 25, 2005 and
   March 26, 2004                                                                   23,035         23,035
Capital in excess of par value                                                   2,744,573      2,744,573
Retained earnings (Deficit)                                                     (1,621,903)    (1,788,387)
                                                                               -----------    -----------
          Total stockholders' equity                                             1,145,705        979,221
                                                                               -----------    -----------

          Total liabilities and stockholders' equity                           $ 3,241,866    $ 2,793,567
                                                                               ===========    ===========
</TABLE>


    The accompanying notes and independent auditors' report should be read in
                    conjunction with the financial statements


                                      -31-
<PAGE>

                                IEH CORPORATION

                             STATEMENT OF OPERATIONS

              For the Years ended March 25, 2005 and March 26, 2004
<TABLE>
<CAPTION>

                                                              Years Ended
                                                       --------------------------
                                                        March 25,      March 26,
                                                          2005           2004
                                                       -----------    -----------
<S>                                                    <C>            <C>
REVENUE, net sales (Note 15)                           $ 5,321,269    $ 4,892,755
                                                       -----------    -----------

COSTS AND EXPENSES:

  Cost of products sold                                  3,819,234      3,501,609
  Selling, general and administrative                    1,027,222        957,952
  Interest expense                                         104,185        105,661
  Depreciation and amortization                            177,504        203,650
                                                       -----------    -----------
                                                         5,128,145      4,768,872
                                                       -----------    -----------


OPERATING INCOME                                           193,124        123,883

OTHER INCOME                                                   248            387
                                                       -----------    -----------

INCOME BEFORE INCOME TAXES                                 193,372        124,270

PROVISION FOR INCOME TAXES                                 (26,888)        (5,847)
                                                       -----------    -----------

NET INCOME                                             $   166,484    $   118,423
                                                       ===========    ===========

BASIC AND DILUTED EARNINGS PER COMMON SHARE (NOTE 1)   $       .07    $       .05
                                                       ===========    ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING (IN THOUSANDS)                                 2,303          2,303
                                                       ===========    ===========
</TABLE>

    The accompanying notes and independent auditors' report should be read in
                    conjunction with the financial statements


                                      -32-
<PAGE>
<TABLE>
<CAPTION>
                                           IEH CORPORATION

                                   STATEMENT OF STOCKHOLDERS' EQUITY
                         For the Years Ended March 25, 2005 and March 26, 2004


                                                        Capital in     Retained
                                                         Excess of     Earnings
                                 Common Stock            Par Value     (Deficit)        Total
                           --------------------------   -----------   -----------    -----------
                              Shares       Amount
                           -----------   -----------
<S>                        <C>          <C>           <C>           <C>            <C>
Balances, March 28, 2003     2,303,468   $    23,035   $ 2,744,573   $(1,906,810)   $   860,798

Net income: year ended
  March 26, 2004                                                         118,423        118,423
                           -----------   -----------   -----------   -----------    -----------

Balances, March 26, 2004     2,303,468        23,035     2,744,573    (1,788,387)       979,221

Net income: year ended
  March 25, 2005                                                         166,484        166,484
                           -----------   -----------   -----------   -----------    -----------

Balances, March 25, 2005     2,303,468   $    23,035   $ 2,744,573   $(1,621,903)   $ 1,145,705

</TABLE>

    The accompanying notes and independent auditors' report should be read in
                    conjunction with the financial statements



                                      -33-
<PAGE>
<TABLE>
<CAPTION>
                                      IEH CORPORATION

                                  STATEMENT OF CASH FLOWS
                                Increase (Decrease) in Cash
                   For the Years Ended March 25, 2005 and March 26, 2004



                                                                          Years Ended
                                                                     ----------------------
                                                                     March 25,    March 26,
                                                                       2005         2004
                                                                     ---------    ---------
<S>                                                                  <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                         $ 166,484    $ 118,423
                                                                     ---------    ---------

  Adjustments to reconcile net income to net cash used in
    operating activities

  Depreciation and amortization                                        177,504      203,650

Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                          (182,911)     183,354
  (Increase) decrease inventories                                     (204,505)      74,477
  (Increase) decrease in prepaid expenses and other current assets       2,404       37,106
  (Increase) decrease in other assets                                     (206)       1,074

  (Decrease) increase in accounts payable                              144,541     (279,577)
  (Decrease) increase in other current liabilities                      86,775         (494)
  Increase in accrued corporate income taxes                            13,787       (2,300)
  (Decrease) in due to union health & welfare                          (32,200)     (11,628)
  (Decrease) in pension plan payable                                   (56,000)     (39,000)
                                                                     ---------    ---------

               Total adjustments                                       (50,811)     166,662
                                                                     ---------    ---------

NET CASH PROVIDED BY (USED) FOR OPERATING ACTIVITIES                   115,673      285,085
                                                                     ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Acquisition of property, plant and equipment                       (219,911)    (213,913)
                                                                     ---------    ---------

          NET CASH USED IN INVESTING ACTIVITIES                      $(219,911)   $(213,913)
                                                                     ---------    ---------

</TABLE>

    The accompanying notes and independent auditors' report should be read in
                    conjunction with the financial statements


                                      -34-
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
              For the Years Ended March 25, 2005 and March 26, 2004

                                                       March 25,     March 26,
                                                         2005           2004
                                                       ---------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable, equipment         $  (9,208)    $ (67,563)
Proceeds from accounts receivable financing               (1,624)       (4,694)
Proceeds from loans payable- officers                    135,744            --
                                                       ---------     ---------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES      124,912       (72,257)
                                                       ---------     ---------

INCREASE (DECREASE) IN CASH                               20,674        (1,085)

CASH, beginning of period                                  4,480         5,565
                                                       ---------     ---------

CASH, end of period                                    $  25,154     $   4,480
                                                       =========     =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
cash paid during the year for:

     Interest                                          $  95,347     $  97,309
                                                       =========     =========

     Income Taxes                                      $   7,612     $      --
                                                       =========     =========


    The accompanying notes and independent auditors' report should be read in
                    conjunction with the financial statements


                                      -35-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          Description of Business:

          The Company is engaged in the design, development, manufacture and
          distribution of high performance electronic printed circuit connectors
          and specialized interconnection devices. Electronic connectors and
          interconnection devices are used in providing electrical connections
          between electronic component assemblies. The Company develops and
          manufactures connectors, which are designed for a variety of high
          technology and high performance applications, and are primarily
          utilized by those users who require highly efficient and dense (the
          space between connection pins with the connector) electrical
          connections.

          The Company is continuously redesigning and adapting its connectors to
          meet and keep pace with developments in the electronics industry and
          has, for example, developed connectors for use with flex-circuits now
          being used in aerospace programs, computers, air-borne communications
          systems, testing systems and other areas. The Company also services
          its connectors to meet specified product requirements.

          Accounting Period:

          The Company maintains an accounting period based upon a 52-53 week
          year, which ends on the nearest Friday in business days to March 31st.
          The years ended March 25, 2005 and March 26, 2004 were comprised of 52
          weeks.

          Revenue Recognition:

          Revenues are recognized at the shipping date of the Company's
          products. The Company has historically adopted the shipping terms that
          title merchandise passes to the customer at the shipping point (FOB
          Shipping Point). At this juncture, title has passed, the Company has
          recognized the sale, inventory has been relieved, and the customer has
          been invoiced. The Company does not offer any discounts, credits or
          other sales incentives.

          The Company's policy with respect to customer returns and allowances
          as well as product warranty is as follows:

          The Company will accept a return of defective product within one year
          from shipment for repair or replacement at the Company's option. If
          the product is repairable, the Company at its own cost will repair and
          return to the customer. If unrepairable, the Company will either offer
          an allowance against payment or will reimburse the customer for the
          total cost of product.

          Most of the Company's products are custom ordered by customers for a
          specific use. The Company provides engineering services as part of the
          relationship with its customers in developing the custom product. The
          Company is not obligated to provide such engineering service to its
          customers. The Company does not charge separately for these services.


                                      -36-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

          Inventories:

          Inventories are stated at cost, on a first-in, first-out basis, which
          does not exceed market value.

          The Company manufactures products pursuant to specific technical and
          contractual requirements. The Company historically purchases material
          in excess of its requirements to avail itself of favorable pricing as
          well as the possibility of receiving additional orders from customers.
          This excess may result in material not being used in subsequent
          periods, which may result in this material being deemed obsolete.

          The Company annually reviews its purchase and usage activity of its
          inventory of parts as well as work in process and finished goods to
          determine which items of inventory have become obsolete within the
          framework of current and anticipated orders. The Company based upon
          historical experience has determined that if a part has not been used
          and purchased or an item of finished goods has not been sold in three
          years, it is deemed to be obsolete. The Company estimates which
          materials may be obsolete and which products in work in process or
          finished goods may be sold at less than cost. A periodic adjustment,
          based upon historical experience is made to inventory in recognition
          of this impairment.

          Concentration of Credit Risk:

          The Company maintains cash balances at one bank. Amounts on deposit
          are insured by the Federal Deposit Insurance Corporation up to
          $100,000 in aggregate. There were no uninsured balances at either
          March 25, 2005 or March 26, 2004.

          Property, Plant and Equipment:

          Property, plant and equipment is stated at cost less accumulated
          depreciation and amortization. The Company provides for depreciation
          and amortization using the Double Declining Balance method over the
          estimated useful lives (5-7 years) of the related assets.

          Maintenance and repair expenditures are charged to operations, and
          renewals and betterments are capitalized. Items of property, plant and
          equipment, which are sold, retired or otherwise disposed of, are
          removed from the asset and accumulated depreciation or amortization
          account. Any gain or loss thereon is either credited or charged to
          operations.

          Income Taxes:

          The Company follows the policy of treating investment tax credits as a
          reduction in the provision for federal income tax in the year in which
          the credit arises or may be utilized. Deferred income taxes arise from
          temporary differences resulting from different depreciation methods
          used for financial and income tax purposes. The Company has adopted
          Statement of Financial Accounting Standards (SFAS) No. 109,
          "Accounting for Income Taxes".


                                      -37-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Net Income Per Share:

          The Company has adopted the provisions of SFAS No. 128, "Earnings Per
          Share", which requires the disclosure of "basic" and "diluted"
          earnings (loss) per share. Basic earnings per share is computed by
          dividing net income by the weighted average number of common shares
          outstanding during each period. Diluted earnings per share is similar
          to basic earnings per share except that the weighted average number of
          common shares outstanding is increased to reflect the dilutive effect
          of potential common shares, such as those issuable upon the exercise
          of stock or warrants, as if they had been issued. For the years ended
          March 25, 2005 and March 26, 2004, there were no items of potential
          dilution that would impact on the computation of diluted earnings or
          loss per share.

          Fair Value of Financial Instruments:

          The carrying value of the Company's financial instruments, consisting
          of accounts receivable, accounts payable, and borrowings, approximate
          their fair value due to the relatively short maturity (three months)
          of these instruments.

          Use of Estimates:

          The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the reported amounts of assets and
          liabilities, revenues and expenses, and disclosure of contingent
          assets and liabilities at the date of the financial statements. Actual
          amounts could differ from those estimates.

          Impairment of Long-Lived Assets:

          SFAS No. 121, "Accounting For The Impairment of Long-Lived Assets To
          Be Disposed Of", requires that long-lived assets and certain
          identifiable intangibles to be held and used by an entity be reviewed
          for impairment whenever events or changes in circumstances indicate
          that the carrying amount of an asset may not be recoverable. The
          Company has adopted SFAS No. 121. There were no long-lived asset
          impairments recognized by the Company for the years ended March 25,
          2005 and March 26, 2004.

          Reporting Comprehensive Income:

          The Company has adopted the provisions of SFAS No. 130, "Reporting
          Comprehensive Income". This statement established standards for
          reporting and display of comprehensive income and its components
          (revenues, expenses, gains and losses) in an entity's financial
          statements. This Statement requires an entity to classify items of
          other comprehensive income by their nature in a financial statement
          and display the accumulated balance of other comprehensive income
          separately from retained earnings and additional paid-in capital in
          the equity section of a statement of financial position. There were no
          material items of comprehensive income to report for the years ended
          March 25, 2005 and March 26, 2004.


                                      -38-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Segment Information:

          The Company has adopted the provisions of SFAS No. 131, "Disclosures
          About Segment of An Enterprise and Related Information." This
          Statement requires public enterprises to report financial and
          descriptive information about its reportable operating segments and
          establishes standards for related disclosures about product and
          services, geographic areas, and major customers. The adoption of SFAS
          No. 131 did not affect the Company's presentation of its results of
          operations or financial position.

          Research and Development:

          The Company provides personalized engineering services to its
          customers by designing connectors for specific customer applications.
          The employment of electromechanical engineers is the anticipated
          cornerstone of the Company's future growth. The Company maintains a
          testing laboratory where its engineers experiment with new connector
          designs based on changes in technology and in an attempt to create
          innovative, more efficient connector designs.

          The Company expended $31,000 and $49,500 for the years ended March 25,
          2005 and March 26, 2004, respectively, on Company sponsored research
          and development activities relating to the development of new designs,
          techniques and the improvement of existing designs. In addition, the
          Company received $31,000 in revenues for the year ended March 25, 2005
          and $49,000 for the year ended March 26, 2004, respectively, pursuant
          to customer sponsored research activities.

          Effect of New Accounting Pronouncements:

          The Company does not believe that any recently issued but not yet
          effective accounting standards, have a material effect on the
          Company's financial position, results of operations or cash flows.


Note 2 -  INVENTORIES:

          Inventories are stated at cost, on a first-in, first-out basis, which
          does not exceed market value.

          The Company manufactures products pursuant to specific technical and
          contractual requirements. The Company historically purchases material
          in excess of its requirements to avail itself of favorable pricing as
          well as the possibility of receiving additional orders from customers.
          This excess may result in material not being used in subsequent
          periods, which may result in this material being deemed obsolete.


                                      -39-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


Note 2 -  INVENTORIES: (continued)

          The Company annually reviews its purchase and usage activity of its
          inventory of parts as well as work in process and finished goods to
          determine which items of inventory have become obsolete within the
          framework of current and anticipated orders. The Company based upon
          historical experience has determined that if a part has not been used
          and purchased or an item of finished goods has not been sold in three
          years, it is deemed to be obsolete. The Company estimates which
          materials may be obsolete and which products in work in process or
          finished goods may be sold at less than cost. A periodic adjustment,
          based upon historical experience is made to inventory in recognition
          of this impairment.

          Inventories are comprised of the following:

                              March 25,    March 26,
                                2005         2004
                             ----------   ----------

          Raw materials      $  824,926   $  689,851
          Work in progress      210,292      196,182
          Finished goods        183,885      128,565
                             ----------   ----------

                             $1,219,103   $1,014,598
                             ==========   ==========

Note 3 -  PREPAID EXPENSES AND OTHER CURRENT ASSETS:

          Prepaid expenses and other current assets are comprised of the
          following:

                                   March 25,  March 26,
                                      2005      2004
                                    -------   -------
          Prepaid insurance         $14,062   $11,030
          Prepaid corporate taxes        --     5,489
          Other current assets          150        97
                                    -------   -------
                                    $14,212   $16,616
                                    =======   =======


                                      -40-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


Note 4 -  PROPERTY, PLANT AND EQUIPMENT:

          Property, plant and equipment are as follows:

                                                March 25,    March 26,
                                                  2005         2004
                                               ----------   ----------

          Computers                            $  198,257   $  195,102
          Leasehold improvements                  585,831      585,831
          Machinery and equipment               4,549,183    4,430,202
          Tools and dies                        1,846,073    1,748,298
          Furniture and fixture                   154,808      154,808
          Website development cost                  7,550        7,550
                                               ----------   ----------

                                                7,341,702    7,121,791
          Less: accumulated depreciation and
          amortization                          6,169,269    5,991,765
                                               ----------   ----------

                                               $1,172,433   $1,130,026
                                               ==========   ==========


Note 5 -  ACCOUNTS RECEIVABLE FINANCING:

          The Company entered into an accounts receivable financing agreement
          whereby it can borrow up to eighty percent of its eligible receivables
          (as defined in the agreement) at an interest rate of 2 1/2 % above JP
          Morgan Chase's publicly announced rate of 5.75% at March 25, 2005,
          with a minimum of 12% per annum. The agreement has an initial term of
          one year and will automatically renew for successive one-year terms,
          unless terminated by the Company or Lender upon receiving sixty days
          prior notice. The loan is secured by the Company's accounts receivable
          and inventories. The balance due under this agreement as of March 25,
          2005 was $643,472. The balance due as of March 24, 2004 was $645,096.


Note 6 -  OTHER CURRENT LIABILITIES:

          Other current liabilities are comprised of the following:

                                            March 25,    March 26,
                                              2005         2004
                                            --------     --------

          Payroll and vacation accruals     $105,812     $ 87,964
          Sales commissions                   14,882        9,705
          Other                               73,420        9,670
                                            --------     --------
                                            $194,114     $107,339
                                            ========     ========


                                      -41-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 7 -  NOTES PAYABLE EQUIPMENT:

          The Company financed the acquisition of new equipment with notes
          payable. The notes are payable over a sixty month period. The balance
          remaining at March 25, 2005 amounted to $10,898. The interest rates on
          the two remaining leases are 22% and 18% respectively.

          Aggregate future principal payments are as follows:

           Fiscal Year Ending March:
          2006                          $ 4,325
          2007                            3,358
          2008                            3,215
                                        -------
                                        $10,898
                                        =======

Note 8 -  RELATED PARTIES TRANSACTIONS

          During the year ended March 26, 2004, two of the Company's officers
          loaned the Company a total of $52,000 on a non-interest bearing basis.
          The Company used these funds as a source of additional working
          capital.

          During the year ended March 25, 2005, one of these officers loaned the
          Company an additional $135,744 on a non-interest bearing basis as
          well. These funds were also used by the Company for working capital
          requirements. As of March 25, 2005, the amount owed to these officers
          was $187,744.

          Through the period ended June 24, 2005, the Company had repaid $36,244
          of the total funds loaned to it.


Note 9 -  INCOME TAXES:

          Income taxes are provided for the tax effects of transactions reported
          in the financial statements, and consist of taxes currently due as
          well as deferred taxes related to differences between financial
          statement and tax basis of assets and liabilities for financial
          statement and income tax reporting purposes. Deferred tax assets and
          liabilities represent the future tax consequences of these temporary
          differences, which will either be taxable or deductible in the year in
          which the assets or liabilities are recovered or settled. Accordingly,
          measurement of the deferred tax assets and liabilities attributable to
          the book-tax basis differentials are computed at a rate of 34% for
          federal and l2% for state and local tax purposes.


                                      -42-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 9 -  INCOME TAXES:

          The components of the deferred tax assets and liabilities are as
          follows:
<TABLE>
<CAPTION>
                                                                  March 25,         March 26,
                                                                     2005             2004
                                                                 -----------      -----------
<S>                                                              <C>              <C>
          Deferred tax assets:

          Net operating loss carryforwards                       $ 1,933,105      $ 2,116,868
                                                                 -----------      -----------

          Gross deferred assets tax assets                         1,933,105        2,116,868

          Deferred tax liabilities:

          State income taxes                                         (79,111)         (86,368)
                                                                 -----------      -----------

          Net deferred tax assets before valuation allowance       1,853,994        2,030,500

          Valuation allowance                                     (1,853,994)      (2,030,500)
                                                                 -----------      -----------

          Net deferred tax assets                                $         0      $         0
                                                                 ===========      ===========
</TABLE>

          At March 31, 2000, the Company established a 100% valuation allowance
          for the net deferred tax assets, as management could not determine
          that it was more likely than not that the deferred tax assets could be
          realized. The change in valuation allowance amounted to $176,506 for
          the year ended March 25, 2005.

          As of March 25, 2005, the Company has available Federal net operating
          loss carryforwards (NOL's) totaling approximately $1,903,533 which
          expire at various times through March 31, 2012, for State and Local
          purposes, the company has available NOL's approximating $2,051,501,
          which expire at various times through March 31, 2012.

          Utilization of the NOL's may be limited pursuant to Internal Revenue
          Code Section 382 should significant changes to the existing ownership
          of the Company occur.

          A reconciliation of income taxes computed at the Federal statutory
          rate as compared to income tax expense at the effective income tax is
          as follows:

                                                          March 25,  March 26,
                                                            2005       2004
                                                          ---------  ---------
          Federal statutory income tax (benefit) rate      (34.0)%    (34.0)%

          State tax benefit, net of Federal liability      (12.2)%    (12.2)%

          Net change in valuation allowance                 46.2%      46.2%

          Effective income tax (benefit) rate              ( - )%     ( - )%


                                      -43-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


Note 10 - PENSION PLAN-SALARIED PERSONNEL:

          On June 30, 1995, the Company applied to the Pension Benefit Guaranty
          Corporation ("PBGC") to have the PBGC assume all of the Company's
          responsibilities and liabilities under its Salaried Pension Plan. On
          April 26, 1996, the PBGC determined that the Salaried Pension Plan did
          not have sufficient assets available to pay benefits, which were and
          are currently due under the terms of the Plan.

          The PBGC further determined that pursuant to the provisions of the
          Employment Retirement Income Security Act of 1974, as amended
          ("ERISA"), that the Plan must be terminated in order to protect the
          interests of the Plan's participants. Accordingly, the PBGC proceeded
          pursuant to ERISA to have the Plan terminated and the PBGC appointed
          as statutory trustee, and to have July 31, 1995 established as the
          Plan's termination date.

          The Company and the PBGC negotiated a settlement on the entire matter
          and on July 2, 2001, an agreement was reached whereby the Company's
          liability to the PBGC was reduced to $244,000. The Company will make
          monthly payments to the PBGC as follows:

             September 1, 2003 to August 1, 2004        $2,000 per month
             September 1, 2004 to August 1, 2006        $3,000 per month
             September 1, 2006 to August 1, 2007        $4,000 per month


          Additionally, the Company has made balloon payments of $25,000 each on
          January 1, 2004, May 1, 2004 and May 1, 2005. The Company is also
          obligated to make an additional balloon payment of $25,000 on January
          1, 2006.

          The Company will also grant the PBGC a lien on the Company's machinery
          and equipment.

          As a result of this agreement the amount due the PBGC was restated to
          $244,000. $56,000 was paid during the year ended March 25, 2005 and
          $39,000 was paid during the year ended March 26, 2004. The balance of
          $149,000 is reported as follows: $86,000 as a current liability and
          $63,000 as a long-term liability.

Note 11 - CHANGES IN STOCKHOLDERS' EQUITY:

          The accumulated deficit decreased by $166,484, which represents the
          net income for the year.


                                      -44-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 12 - 2001 EMPLOYEE STOCK OPTION PLAN:

          On September 21, 2001 the Company's shareholders approved the adoption
          of the Company's 2002 Employees Stock Option Plan to provide for the
          grant of options to purchase up to 750,000 shares of the Company's
          common stock to all employees, including senior management.

          Options granted to employees under this plan may be designated as
          options which qualify for incentive stock option treatment under
          Section 422A of the Internal Revenue Code, or options which do not so
          qualify.

          Under this plan, the exercise price of an option designated as an
          Incentive Stock Option shall not be less than the fair market value of
          the Company's common stock on the day the option is granted. In the
          event an option designated as an incentive stock option is granted to
          a ten percent (10%) shareholder, such exercise price shall be at least
          110 Percent (110%) of the fair market value or the Company's common
          stock and the option must not be exercisable after the expiration of
          five years from the day of the grant.

          Exercise prices of non-incentive stock options may be less than the
          fair market value of the Company's common stock.

          The aggregate fair market value of shares subject to options granted
          to a participant(s), which are designated as incentive stock options,
          and which become exercisable in any calendar year, shall not exceed
          $100,000. As of March 25, 2005 no options had been granted under the
          plan.

Note 13 - CASH BONUS PLAN:

          In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
          Executive Officers. Contributions to the Bonus Plan are made by the
          Company only after pre-tax operating profits exceed $150,000 for a
          fiscal year, and then to the extent of 10% of the excess of the
          greater of $150,000 or 25% of pre-tax operating profits. There were no
          contributions to the Bonus Plan for the fiscal year ended March 26,
          2004. For the year ended March 26, 2005 the contribution was $4,188.


                                      -45-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 14 - COMMITMENTS:

          The Company exercised its option to renew its lease on its facility
          for 10 years. The original lease was in effect through August 23,
          2001.

          The Company is obligated under this lease renewal through August 23,
          2011, at minimum annual rentals as follows:

          Fiscal year ending March:

          2006                    $173,371
          2007                     112,765
          2008                     112,765
          2009                     112,765
          2010                     112,765
          2011                      75,177
                                  --------
                                  $699,608
                                  ========

          The rental expense for the years ended March 25, 2005 and March 26,
          2004 was $169,975 and $112,765, respectively.

          Rental expense for the year ended March 25, 2005 includes a surcharge
          of $57,210.

          The Company has a collective bargaining multi-employer pension plan
          with the United Auto Workers of America, Local 259. Contributions are
          made in accordance with a negotiated labor contract and are based on
          the number of covered employees employed per month. With the passage
          of the Multi-Employer Pension Plan Amendments Act of 1990 ("The Act"),
          the Company may become subject to liabilities in excess of
          contributions made under the collective bargaining agreement.
          Generally, these liabilities are contingent upon the termination,
          withdrawal, or partial withdrawal from the Plan.

          The Company has not taken any action to terminate, withdraw or
          partially withdraw from the Plan nor does it intend to do so in the
          future. Under the Act, liabilities would be based upon the Company's
          proportional share of the Plan's unfunded vested benefits, which is
          currently not available. The amount of accumulated benefits and net
          assets of such Plan also is not currently available to the Company.
          The total contributions charged to operations under this pension plan
          were $54,643 for the year ended March 25, 2005 and $47,519 for the
          year ended March 26, 2004.

          As of March 25, 2005, the Company had satisfied the arrears on the
          Union's health and welfare plan.

Note 15 - REVENUES FROM MAJOR CUSTOMERS:

          In the fiscal year ended March 25, 2005, approximately 34% of the
          Company's total revenues were earned from one customer. Total sales to
          this customer were approximately $1,783,000. No other customer
          accounted for over 10% of the Company's sales. Accounts receivable as
          of March 25, 2005, included a receivable from one customer, which
          amounted to 38% of the total accounts receivable, no other customer
          had receivables over 10%.


                                      -46-